2013: Tesla shows off Model X SUV at new Palo Alto showroom

PALO ALTO -- If Hollywood movie makers were trying to create the quintessential Silicon Valley scene, they couldn't have done any better than the one Saturday afternoon in the 4100 block of El Camino Real.

Hundreds of people, nearly all of them snapping photos with iPhones, milled about at the opening of America's newest Tesla store, one mile from Stanford University and three miles from Google's campus. The sleek, white showroom gleamed. Flat screen monitors touted the benefits of the company's pricey and tech-hip all-electric vehicles. Music from a live DJ pulsed. And the valet parking was thick with visitors arriving in Tesla Model S sedans they already owned.

"It's awesome. It looks easy to drive, and it looks so much better than a minivan. Minivans are for old people," said Vilma Estacio-Melamed, of San Jose, who admired a white Model X, Tesla's new SUV, which is scheduled to begin production next year.

The 27,000 square foot retail outlet, the vehicular equivalent of an Apple store, is the fifth Tesla location in the Bay Area, joining stores and service centers at Santana Row in San Jose, Fremont, Burlingame and San Rafael. Tesla now has 41 locations in North America.

"It's in the heart of Silicon Valley," said Telsa spokeswoman Alexis Georgeson. "The market is very strong for us in the Bay Area and Silicon Valley. We're opening stores in places where we expect to sell vehicles."

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Founded in 2003, Palo Alto-based Tesla Motors has become a darling of high-tech set and environmentalists. From 2008 to 2012, the company sold 2,400 of its first vehicle, the Tesla Roadster, a two-seat electric sports car, with a base price of $109,000.

Its second car, the Model S, is a sedan that came out last year to rave reviews. The vehicle, which goes up to 265 miles on an electric charge and accelerates from 0 to 60 mph in 5.6 seconds, was named 2013 Car of the Year by Motor Trend magazine and received the highest score ever for a vehicle from Consumer Reports. The car has a base price of $69,900 to $79,900 before tax credits, depending on the battery pack.

"It's the first expensive car we've ever bought," said Christine Sireci, of Saratoga, who bought a dark blue Model S in March with her husband, Don, and visited the store Saturday. "I was driving a 2000 Chevy Astro. But I drove the Tesla and I fell in love with it."

Through June 30, Tesla sold 13,000 Model S cars and expects to sell 21,000 this year, Georgeson said.

Despite the huge buzz for the company -- whose CEO, Elon Musk, is a celebrity and whose stock price has jumped from $22 a share in January 2012 to $178 on Friday -- electric vehicles still represent less than 1 percent of American car sales. By comparison, General Motors sells 10 million vehicles a year.

There is also plenty of competition in the green motoring space. For much of the year, the top-selling car in California has been the Toyota Prius, which has sold more than 4 million worldwide since its launch in 1997. Larger carmakers, such as Nissan, with its all-electric Leaf, and Chevrolet, with its plug-in hybrid Volt, sell alternative vehicles for half to one third the cost of a Tesla.

And after a year of glowing press coverage, Tesla hit some bumps in the road when a video showing a Model S bursting into flames went viral earlier this month. The fire was the result of a driver near Kent, Wash., driving over a piece of metal debris on a freeway. As the stock dropped, Musk reassured the public that the fire was a freak occurrence and that the driver was not injured. A gasoline-powered car would have burned much worse in the same accident, he said.

The dashboard of a prototype Model X is on display at the new Tesla showroom in Palo Alto on Oct. 12, 2013. (Karl Mondon/Staff)

The company has so far received 6,000 orders for its Model X SUV, with customers putting down $5,000 for the standard version and $40,000 for the signature version, even though Tesla has not announced the price of the vehicle or exactly when it will begin delivery. Most deliveries are expected in 2015, and the base price is expected to range from $70,000 to $90,000.

That is a lot of money, said Estacio-Melamed, snapping a photo of the Model X on Saturday in the new Palo Alto showroom.

"But if it is better than all the other cars," she said, "maybe it's worth it."